Lenovo Had 9th Consecutive Quarterly Revenue Growth

In the second fiscal quarter, Lenovo revenue reached US$13.5 billion, marking the ninth consecutive year-on-year quarter of growth. Pre-tax income grew 45% compared to the same quarter a year earlier, to US$310 million.

Net income also increased 20% to US$202 million. Revenue mix continues to be balanced across the company’s four geographies with each reporting more than 20% share of revenue. Basic earnings per share for the second quarter were 1.69 US cents or 13.23 HK cents. Lenovo’s Board of Directors declared an interim dividend of 6.3 HK cents per share.

“During the quarter we were pleased to see our growth momentum deliver continued solid financial performance amidst a complex and dynamic global trading environment. This success is a testament to our commitment to innovation, to our customers across 180 markets around the world, and to how the world continues to embrace our vision to deliver smarter technology for all,“ said Yang Yuanqing, Lenovo Chairman and CEO.

The strong results are led by the Intelligent Devices Group (IDG). The PC and Smart Devices Group (PCSD), one of the two IDG business units, reported US$10.7 billion in revenue and record PTI margin of 5.7%. Sales volume in PCs enjoyed strong growth of 7.1%, resulting in overall PCSD revenue growth of 4.1%. Pre-tax income was US$612 million, up US$97 million.

Mobile Business Group (MBG) posted its fourth consecutive quarter of profitability and positive PTI, improving US$57 million. While there was a small revenue decline reported (5.7% to US$1.5 billion), the group continues to focus on inventory controls, portfolio efficiency and diligent cost controls to help expand margins.

The Data Center Group (DCG) successfully navigated challenging circumstances during the quarter and reports its 9th consecutive quarter of narrowing losses. Overall revenue in DCG declined 13.8% as a result of lower prices for key components and softness in demand from some of the largest hyperscale customers.  Revenue, excluding Hyperscale, grew almost 13% with China reporting more than a 47% increase in non-hyperscale revenue compared to the same quarter a year ago.

Software and Services revenue grew 35%, reaching almost US$900 million. Device as a Services (DaaS), premier support service and managed services all grew significantly to contribute to this performance and ongoing diversification of the company’s revenue streams. This business is expected to exceed US$1 billion per quarter very soon.